Ahead of the Prabowo-Gibran First Year, Budget Efficiency Becomes the Fiscal Breakthrough of the Prabowo-Gibran Administration
By: Dhita Karuniawati )*
As the first year of the administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka approaches, the direction of fiscal policy and state budget management is demonstrating a significant paradigm shift. The government has now affirmed its commitment to adopting a new paradigm in budget efficiency, not merely cutting spending, but optimizing every rupiah to maximize public welfare and accelerate national development.
This new paradigm emerged from an evaluation of global fiscal challenges and the need to maintain national economic sustainability. With increasing global economic uncertainty, fluctuating commodity prices, and international geopolitical pressures, efficiency is key to maintaining a resilient and productive state budget. The government emphasizes that efficiency does not mean savings at the expense of public services, but rather improving governance and prioritizing budget use so that every program truly impacts the community.
Budget efficiency officially began when Presidential Instruction (Inpres) Number 1 of 2025 was issued on January 22, 2025. The procedures for implementing budget efficiency were detailed in Minister of Finance Regulation (PMK) Number 56 of 2025, promulgated on August 5, 2025. The government targeted budget efficiency to achieve state budget savings of IDR 306.69 trillion, consisting of IDR 256.10 trillion in ministerial and institutional spending and IDR 50.59 trillion in regional transfers (TKD). PMK 56 of 2025 listed 15 expenditure items targeted for budget efficiency. These included office stationery, travel, infrastructure, and ceremonial activities and meetings.
The number of expenditure items cut represents one less than the previous regulation, Minister of Finance Letter Number S-37/MK.02/2025, which listed 16 items. Other expenditure items not directly related to development priorities were not included in the efficiency list. However, with the change of Minister of Finance from Sri Mulyani Indrawati to Purbaya Yudhi Sadewa on September 8, 2025, the meaning of budget efficiency has changed.
Under the leadership of Minister of Finance Purbaya Yudhi Sadewa, the term budget efficiency is no longer simply defined as cutting or saving. Purbaya defines budget efficiency as an effort to ensure that state funds are used on time, on target, and not languishing in the treasury without economic benefit. According to him, saving or cutting the budget is not a form of true efficiency.
Although Purbaya’s version of budget efficiency does not involve spending cuts like the previous Minister of Finance, it does not mean he is encouraging unlimited spending (free spending).
Finance Minister Purbaya Yudhi Sadewa stated that the structure of the State Budget (APBN) has not been changed, but its management has been made more efficient. He also cited the policy of transferring Rp 200 trillion in surplus budget balances (SAL) from Bank Indonesia (BI) to banks as an example.
According to Purbaya, this policy allows government funds to be used more efficiently because they are not left idle but are instead utilized to stimulate the economy. In his view, efficiency means ensuring that every rupiah of state funds truly works for the people. If a program isn’t working, the funds must be immediately diverted to other sectors better equipped to execute it. Purbaya also emphasized that he would not block the budgets of ministries/agencies or regional governments from implementing budget efficiency.
Finance Minister Purbaya Yudhi Sadewa’s views on budget efficiency were supported by Piter Abdullah, Director of Policy and Programs at the Prasasti Center for Policy Studies.
Piter stated that Purbaya’s steps represent a redefinition of the concept of budget efficiency. The state budget should not be viewed as an instrument for savings, but as a tool to stimulate the economy.
Piter highlighted that the main problem in Indonesia’s state budget has not been revenue, but rather expenditure. Revenue is still limited, but the main challenge is how to improve spending to make it more efficient and effective. This is what Finance Minister Purbaya Yudhi Sadewa is currently advocating.
With this shift in definition, budget efficiency in the Prabowo-Gibran era is no longer about nominal savings, but rather optimizing economic impact. Government spending is directed towards providing added value, not simply meeting absorption targets.
As the Prabowo-Gibran administration approaches its first year, the implementation of a new paradigm of budget efficiency reflects the spirit of more substantial bureaucratic reform. The government is no longer focused on output.administrative input, but rather on tangible results for the people.
This paradigm also reflects the awareness that future development challenges demand adaptive fiscal governance, capable of responding to rapid changes, such as the global economic crisis, climate change, and technological transformation. With efficiency as a foundation, the government strives to maintain a balance between fiscal sustainability and national development needs.
The new paradigm of budget efficiency, ahead of the first year of the Prabowo-Gibran administration, is a strategic step to ensure the State Budget (APBN) becomes a more effective and equitable development instrument. The government’s focus is not simply on reducing spending, but rather on improving governance so that every rupiah of the budget brings tangible benefits to the people.
By strengthening the new paradigm of budget efficiency, the government affirms its commitment to building an independent, transparent, and competitive Indonesia. This paradigm is not only a reflection of fiscal efficiency, but also a manifestation of modern governance that is responsive to future challenges.
*) The author is a contributor to the Indonesian Strategic Information Study Institute
